In my shop, we have 11 pieces to the puzzle.
1. Sales
2. Dropoff
3. Check-in
4. Blueprinting
5. Mirror Matching
6. Body
7. Prep/paint
8. Build
9. QC
10. Delivery
11. $ in the bank.
All eleven pieces are very important, but for time’s sake in the coming days we will discuss the Blueprinting piece the most. Before we discuss Blueprinting, we need to discuss two very high-level crucial points to our businesses.
CULTURE & THE TIME VALUE OF $:
1. Let’s try an explain CULTURE in this short story: Let’s say I want to build a deck in the back of my house. I reach out to a couple friends of mine to come help me. They both agree to take one of their Saturdays to do this. They show up early and I have all the right tools, materials, along with a well written out plan and even a drawing of what the finished deck is supposed to look like. Let’s say we know it’s going to be a hot day, but no rain forecasted, so we dive in. By noon we are almost halfway done, and the work is laborious of course, but things are going very smoothly. Then by 5:00pm we are tired, sweaty, dirty, but now we can see the fruits of labor of a near work of art with a finished deck!! This is how we make work fun with a sense of accomplishment.
On the flip side, my friends show up early to help me build a deck. By noon we have already made three trips to Home Depot for missing tools and materials, on top of that we had to re-drill three posts because they were in the wrong spot due to a plan for disaster. By 5:00pm were not even halfway done, we are all frustrated with the project and worse even, each other.
When comparing our shops to the two deck project scenarios, this can be the difference between Blueprinting (100% meticulous disassembly) VS a partial Tear Down. We will dive into this more soon.
2. TIME VALUE OF $: How much is an hour worth in your shop?? As it was explained to me: Let’s say we have a shop that does $1,000,000 in gross sales per year along with a 10% net profit or $900,000 per year in cost. Take $900,000 annual cost / 2080 working hours per year = $432.69 per hour. That means this example shop is burning $432.69 per hour! A $2,000,000 shop at a 10% net is burning $865 per hour! A $4,000,000 shop at a 10% net is burning $1,731 per hour! WHAT DOES THIS MEAN GREG??
Example: We discover a missing part during the reassembly of the next car to go out. Our shop is like a $$$$ printing machine and the conveyor belt has just stopped. What’s the cost per hour? As my coach taught me, “Cost is even more than numerical”. The business suffers financial loss, the employees are frustrated with themselves, and each other.
THE WORST PART is, we have a customer at the end of this machine that must now even wait longer to get their car back!! Just keep in mind, I am trying to help shops produce a near 20% net by helping everyone to see how expensive problems are. We are just setting a foundation at this point to fix these problems. Back again next Monday at 6:00pm EST and please take time to figure your cost per hour for your shop. Once you have this figure, write it down on a white board in big numbers where it will stare at you in the face every day!! Mistakes are very expensive!